Nobody Cares More About Your Money Than You Do

This article is the 12th of a 14-part series that explores the core tenets of Get Rich Slowly.

I’ve read a lot of stuff lately about how scammers take advantage of other people. (Here, for example, is a brief summary of seven psychological tricks con artist use.) It’s easy to think that those who lose their money are just unfortunate suckers. That’s not always true. Often they’re folks just like me and you who get talked into thinking somebody else knows more than they do.

On some level, the same thing happens all the time with bankers and brokers and real-estate agents and even with friends and family. These folks may not be con artists, but we’ve all allowed these other people to tell us what we ought to do with our money. We let ourselves believe that they’re able to make better decisions about our financial situation than we are.

Sometimes they can — but mostly, they can’t. Or won’t. Because the truth is, your money just isn’t as important to anyone else as it is to yourself.

One of the most powerful lessons you can learn is that nobody cares more about your money than you do. When you realize this, when you take responsibility for making your own financial decisions (instead of letting others make them for you), it can bring a tremendous sense of power and control to your life.

Trust no oneIf your real-estate agent says you can afford a particular house, don’t just take her word for it. Run the numbers yourself. Set your own budget for a mortgage, don’t just trust the mortgage broker or the bank. Of course they think you can afford more — they have commissions riding on it!

If your insurance salesman tells you that whole life is better than term, don’t just take his word for it. Do your own research. Find out what’s right for your situation. (Hint: It’s probably term.) Of course he wants you to buy whole life — he’ll make five to ten times more than he would if you bought term.

If your lawyer tells you to create an living trust in addition to a simple will, don’t just take her word for it. Dig a little deeper. Learn what a living trust is. Find out why people use them. Ask yourself if this makes sense in your circumstances. You may very well decide to have your lawyer create a living trust — or you may decide that $800 is better spent elsewhere.

If the salesman at the Mega Mart argues that you should take out an extended warranty on your new 180″ deluxe dilithium-drive television, don’t just take his word for it. He has zero motivation to give you advice that’s in your best interest. His advice is based on what’s in his best interest, which means more money in his pocket.

If your favorite personal-finance blogger urges you to invest in index funds, don’t just take her word for it. Read up on the subject yourself. Though it’s unlikely that a blogger is going to profit from your investment choices, it’s very possible that her investment goals and your investment goals are different. Maybe she’s well off and merely wants to match market returns. Maybe you’re young and would like a little more risk. Use the blogger’s advice as a starting point, but do your own reading, your own planning, and make your own investment decisions.

When you see an ad on television or on a blog or in a magazine, don’t just believe what the marketing copy tells you. Of course the latest Thneeds are the best! That’s what all ads say, right? Big corporations don’t have your best interest at heart. All they care about is the bottom line. To get the facts on quality and performance, check out impartial reviews through Amazon and Consumer Reports — and your friends.

The truth is out there
Don’t get me wrong. I’m not saying that it’s bad to talk to a financial planner or to use a real-estate agent to buy a house. You should absolutely have a team of financial advisers. Heed the advice of experts. Listen to what they have to say. But don’t follow their recommendations blindly.

The advice that others give you is almost always in their best interest — which may or may not be the same as your best interest. Never forget this. Don’t do what other people tell you just because they have authority or because they have a silver tongue.

Read. Research options. Understand the pros and cons of every choice. (Because every choice will have its pros and cons.) Don’t become obsessed with perfect, and be willing to make mistakes. Realize that what’s right for one person may not be right for you.

And, especially, never make a financial decision under time pressure. If somebody tells you this is a limited-time offer and you need to act fast or you’ll miss out, then miss out. It’s almost always the best choice. (Creating time pressure is one of the oldest tricks in the book, and an easy way to get people to go against their own best interest.)

Know what’s important to you and why. Use this knowledge to set goals. And use these goals to direct your choices. When you have a why, it’s easier to trust your own judgment.

Do these things, and you’ll appreciate that nobody cares more about your money than you do.

This is the 12th of a 14-part series that explores my financial philosophy. These are the core tenets of Get Rich Slowly. Other parts include:

I think that often times we falsely underestimate our ability to understand the workings of personal finances. As a result too often we seek to outsource financial decisions. As you say that can be a very dangerous decision. We would do well to remember that just because some knows (or claims to know) more about finances does not mean they have any idea about what is best for you to do with your money. Gaining a little financial self confidence opens the door for you to learn and understand important financial concepts.

The problem is that none of us can possess expertise in all of these different areas. When I was signing papers for the closing of my house, there were all sorts of questions that came to mind. I had to trust the agent to be telling something close to the truth. We just cannot get through life without trusting some people re some things.

When it comes to money questions, that’s problematic. You’re absolutely right that those who act in the role of money “experts” often have a financial incentive to push us in one direction or another. That incentive can be so great that the “experts” can even persuade themselves that they really are helping us by doing what they do.

One answer is to become better developed in critical thinking skills. If you know how to detect a scam, you can often see it coming. The problem here is that we all think we are doing this, yet, if we really were, there wouldn’t be so many successful scams.

Another answer is to stick with trustworthy people and institutions. The problem here is that the most dangerous scams of all are the ones that lots of seemingly responsible and ethical people have bought into. Bernie Madoff was respectable as all get out — until he wasn’t respectable at all.

Another answer is to form communities like this one where we warn our friends about various dangers. I see great potential in that possibility. I don’t think all the kinks have been worked out yet, however.

Finally, just being as honest as possible ourselves can be a big plus. Scams often succeed because they appeal to our Get Rich Quick impulse. When we fool ourselves, we open vulnerabilities that others can exploit. Develop a habit of not believing things that common sense says cannot really be so, and you cut off a lot of opportunities for scammers to scam you. Again, the Bernie Madoff case teaches an important less. People fell for what he was selling because they wanted to believe.

Hi JD — Quick note — I think you may not have meant to use living trust and living will interchangeably. At least in my state, they are different — the living will deals with end-of-life decisions, while the living trust is about your financial estate.

The best feeling in the world is when an “expert” tells you something, you research the hell out of it, and come to the same conclusion on your own. To me, that’s how trust is generated. Next time that expert gives me advice, I’ll still research it on my own, but there is some degree of trust there that helps move things along.

In the past I have fallen for that “limited time offer” on a few occasions. Thankfully I’ve become more educated & understand that rarely is that the case & have learned to say “No thank you” when someone pulls that line on me. I was TOO trusting at one point in time. Now, like you said, I do some research on my own.

I’ve done both; listened to others and done it their way and done my own research and made decisions on my own.

I was (and still am) much more content with the latter. Even if I’ll lose money I think I’ll be more content with it since it was MY decision, noone elses. It’s MY mess or success, *I* own it. Not sure why that feels great but it does.

I agree with you, JD. I never believe in taking somebody’s words just because he/she is an expert. I always believe in doing my own research. Blindly following the advice of the so-called experts was the reason why a lot of people in Singapore lost their life savings when Lehman Brothers fold up last year. All of these investors bought a highly sophisticated structured product without understanding what it is and what kind of risks were involved. They simply chose to blindly follow their advisors’ advice. Alas, tragic ensued…

Here’s a great quote that says why you should learn to believe in yourself and take 100% responsibility for your own life:

“Do not believe in anything simply because you have heard it. Do not believe in anything simply because it is spoken and rumored by many. Do not believe in anything simply because it is found written in your religious books. Do not believe in anything merely on the authority of your teachers and elders. Do not believe in traditions because they have been handed down for many generations. But after observation and analysis, when you find that anything agrees with reason and is conducive to the good and benefit of one and all, then accept it and live up to it.” – Buddha

@friend (#3)
Oops. Thanks for the catch. That was a plain and simple brain fart. I meant to use “living trust” in each instance. I just wrote the estate planning section of the book, so I’m quite clear on the differences, but sometimes my fingers don’t obey my brain. :)

“Donâ€™t get me wrong. Iâ€™m not saying that itâ€™s bad to talk to a financial planner or to use a real-estate agent to buy a house. You should absolutely have a team of financial advisers. Heed the advice of experts. Listen to what they have to say. But donâ€™t follow their recommendations blindly.”

This is obviously the best possible advice.

But individuals who are unsure of themselves in a given area just trust the ‘professionals’ to know what to do. The fact that this is a very foolish way to act does not change human nature.

We trust doctors (ok, sometimes we get another opinion) and dentists and veterinarians – but that’s because we know that we don’t know how to treat ourselves or our companion animals.

But when it comes to money, we think we know stuff we don’t; we hear the advisor’s recommendations – and not wanting to seem ignorant – nod our heads and follow along. That’s the problem. It’s too difficult for some to admit ignorance and thus, follow any advice blindly.

Hey JD – do you have a suggestion for getting people to stop such blind following? They are going to be too lazy to do their own research.

Great advice. I especially like the thneeds reference from The Lorax. I always read that book to my class on Earth Day. :)

I think that too many people trusted others with this whole real estate melt down. In my neighborhood houses exploded to over $500,000, and people still bought them! The houses in my neighborhood are old, small, and need a lot of work. The neighborhood is OK, but not great. These houses have leveled out now to high $200’sK, low $300’sK. I definitely think that research is important before making a big money decision.

Art of nonconformity recently posted something related. He felt pressure to hire a VA for the work he didn’t want to do. While not all, a lot of folks who hire professionals to take care of all their money issues: bookeepers, lawyers, financial planners, CPAs are doing it to avoid doing it themselves not because they need professional help. This isn’t always the case and professional guidance may need to be a part of anyone’s financial plan depending on one’s circumstances but unwillingness to take ownership of your finances is part of it. We need to care about our own financial health.

If you don’t mind I have a suggestion for people that still follow others blindly. If you or your friends fall pray to this trap, then at the very least find the best people out there with a proven track record of putting your interests before theirs.

Of course that will take some time to find, but in the end you should be able to rest easier.

@ J.D.:

Nobody cares about your money more than you do. That is true. And like many of the things that you suggest in the article such as doing your own research and so on.

However, another wise thing to do would be to find a person that is not motivated to sell you the most expensive financial product out there. It comes down to doing some research and finding out how the person who is trying to sell you something compensated.

If their compensation is commission then beware! However, if you meet with a financial planner that provides fee based advice then you can feel a bit more safe.

Best of all, it’s the best to shop around first and have at least couple of people giving you their advice on the same topic. That way you will be able to catch any incongruities that might exist.

This is great advice and a good reminder. I find that those giving the advice are not necessarily trying to choose their interests over your own. In some cases, they really don’t know better and other times they have started to believe their own hype to the extent that they really feel their product or service is the only way to go.

Frankly, the same could be said of relationships…nobody cares more about your marriage than you do. I love to give what I feel is high-quality advice on that topic, but I suppose I can at times get narrow-minded and not see all of the options available when a specific question arises. So, I can relate to how easy it would be to give the wrong real estate or insurance advice, even when intentions are pure.

Great point. In the financial industry people think that they are receiving advice. But actually they are just getting a sales pitch. It is super critical to keep in mind who is going to take the loss if the “advice” doesn’t work out. It’s always the buyer, never the salesperson.

My family is a stunning example of this. One of my parents is a dependent person (I won’t go into detail) and my grandfather left money in trust to take care of that parent. My sibling and I didn’t know what to do with the money, so we hired a financial planner who had all of the best credentials and references, even having a show on the local NPR station.

Fast forward 18 months (this was in 2000-2001)and that planner lost 40% of the money entrusted to him to care for someone who could not care for themselves. Fortunately we were able to recover the money in a lawsuit, but that required hundreds of hours of our time, energy and stress. (Yes, we got lawyer’s fees back, too).

If we had kept better tabs on the situation, had forced explanations of things that we didn’t understand, and had been more active in our financial lives, we could have avoided much of this heartache.

NO ONE cares about your (or your loved ones’) money or YOUR FINANCIAL FUTURE like you do.

A very good article. I research everything prior to purchasing and it seems like I still get caught by every scammer out there. Sometimes it seems that only scammers advertise, and if there are any reliable sources, it is impossible to locate them or there are so few they are hidden in the mass unethical.

I agree with writers coin. Once you the advice, do your own reserach, the net has an unlimited supply of information. If your research mathces the advice you were given then it is safe to think that person has your best interest at heart.

My biggest problems came when I was fresh out of college and had my first decent job. Went to get a car and heard “oh you can afford that payment per month”, got a second car for the spouse, “oh, no problem with making that payment”, got the house, “you can easily afford the monthly payment”. The point is not one of those people lied or was trying to rip me off. I could afford it all provided I stayed employed. I just couldn’t afford all of that and eating out most nights, taking expensive (or even not so expensive) vacations, and buying all the stuff I thought I had to have.

Don’t buy into the “monthly” payment idea and that it is okay to “afford” it because if you let them, folks will “afford” you into poverty.

So, so, so true. “The advice that others give you is almost always in their best interest â€” which may or may not be the same as your best interest.”

Advice always carries biases with it, even if it is made out of ignorance. Take time to understand those biases and consider other viewpoints. Figure out your purpose, set your goals, and be steadfast.

What’s funny is how this relates to the paralysis of choice. Many people TRY to do exactly what you recommend and then wind up overwhelmed by information.

And sometimes deals ARE limited time only. If you see a house you want to make an offer on and the real estate agent tells you to make an offer ASAP, she might not be blowing smoke to put the pressure on. Now if she tells you to make an offer on the first house you see you should be skeptical, but if you really like a house she would be remiss in her duties if she didn’t give you a push.

But ultimately it comes down to what I have posted here often:

CAVEAT EMPTOR – LET THE BUYER BEWARE

So many people assume that since someone is certified they are honest. Heck, it often doesn’t even mean they are competent. People assume that if something is illegal then it won’t happen, so they fail to take precautions to protect themselves.

And even then, courts are filled with cases where both sides believed they were acting in the right way, they just disagree about what the right way is. In my experience most people want to do the right thing, they just have an endless capacity for convincing themselves the right thing happens to be what is in their best interest.

Part of the problem (ironically) is that there is just SO much information out there — sometimes it’s difficult to process it all into making the best decisions. Cass Sunstein and Richard Thaler discuss this problem in support of their philosophy of libertarian paternalism in their book “Nudge,” which I highly recommend and intend to review on my blog.

It is good to NOT trust anyone, however cynicism can backfire and leave us wondering why we can’t find that ten bagger. I think, and agree, that research is the greatest tool we have on our side. While we don’t need to trust everyone, we do need the tools to research what we are being told. The Net is rich with information and there are no excuses for parting with our money to scammers.

My biggest problems came when I was fresh out of college and had my first decent job. Went to get a car and heard â€œoh you can afford that payment per monthâ€, got a second car for the spouse, â€œoh, no problem with making that paymentâ€, got the house, â€œyou can easily afford the monthly paymentâ€. The point is not one of those people lied or was trying to rip me off. I could afford it all provided I stayed employed.

GetaGrip – Ah, but you see, you’re supposed to be frugal in every OTHER way. Just like how in college each instructor assumes THEIR class is the only one you do homework for ;)

Yes, do your own research. But don’t let fear of not having the perfect answer stymy your goal of getting into the market. Set a time or resource (# of blogs or books or advisors to consult) limit or figure out what your objective is in doing the research and stick to it. When you hit that time/resource/other limit, get in there and DO. Invest, try, risk. You can limit your risk by reducing the amount of money involved, but you won’t really learn what works for you until you get out there.

Loved the link to 7 psychological strategies. I’ve felt like I’ve been conned a few times in my life, and without a doubt–one or many of those strategies were in play each time.

It’s hard to pull yourself away from the situation, but sometimes the best strategy is just not get started with it in the first place. That’s where blogs like this come in handy so we know all the places these cons are hiding.

I was looking at buying condos a couple of years ago. It would have been at the peak of the bubble, but of course we didn’t know that then. The realtor was a very nice lady that I trusted, but she was pressuring me to make a decision. Not because she was slimely, because she certainly wasn’t. She just had a financial incentive if I close a deal. Ultimately, I ran the numbers and couldn’t afford it. I walked away. Everyone was disappointed. As we know now, I dodged a bullet. However, regardless of the outcome, it was still always the right decision for me. The realtor would have got her percentage closing the deal, regardless of the bubble burst, and I would have been the one dealing with the fallout. The only person looking out for my money was me (and my parents, who advised me to walk away).

JD, Spot on with this one. Nobody cares about your money and your well being like you do. Almost everyone that you find out there has an angle and knowing what that is helps you work with them. People underestimate their ability to handle their own stuff because they think they can’t be competent. It doesn’t take that much research to be competent in something.

I work with many, many different professionals and unfortunately, many of them border on incompetence. They mean well but they are often blinded by what’s best for them and not for you. Real Estate agents, life insurance, lawyers, accountants, etc.

Take lawyers, I have worked with dozens and I would say that 15% are really very competent, 60% of them do an ok job but they will miss things that you will catch that are vital, and 25% of them shouldn’t practice law. And many of the bottom group have been referrals. So when you trust that expert, are you getting good advice? Never take their word for it, think for yourself and you won’t ever regret it.

Last thing: Doing all this research takes time, but you will be a better person for it and a resource for everyone else that you know.

Great tenet. Why the addition for an extra one again? Heck I imagine, over time, you’ll need more then 14!

It’s totally true that no one is more interested in your money then you. Although not everyone is a con-artist even people you hire to help you still won’t feel the brunt of losing your money like you will.

We made the mistake of listening to our mortgage broker, who had been a friend of mine for over 20 years. He suggested we only put 15% down on the home we purchased in 2007, and use a 5% 2nd loan for the rest. (This would allow us to keep some cash in savings which was earmarked for our child’s private school tuition.) Well, I got sick and couldn’t work, we tried to sell but the market was careening downward faster than we could keep up. Now we’re entrenched in the short sale process, which is made worse by that 2nd mortgage being at a different bank than the main mortgage. (The first bank sold off only the 2nd mortgage. I’ll never get a 2nd mortgage again, I truly didn’t understand how dangerous it could be!) Yes, we signed the papers. Yes, we were excited that it seemed he could get us mortgages so we could “afford” the home we wanted. And I know he did none of this with malice, he was just doing what was common practice at that time and what he thought we wanted/would be good for us. But now we are the ones who are suffering, and our mortgage friend and our realtor long ago pocketed the commissions. For anyone who is thinking of buying now because it seems like the right thing to do—seriously consider what you are getting into. Buy WAY under what they say you can afford. And be prepared for the value of your house to go way down. Our house is selling for about 30% less than what we paid. Our credit is ruined. The only thing we’ve got going for us is that prior to this, we always lived frugally and so we don’t have any other debt, no student loans, no cc debt, cars paid off etc. So yes, do your own research, think for yourself, and listen to you gut. Back then, I almost stopped the deal at the last moment because I was nervous about taking on the debt, but I didn’t want to upset the apple cart that late in the game. Boy, I wish I had listened to my feelings instead of going through with it.

Any “expert” who pushes a sale on you is not someone you should trust. Get multiple opinions and ask questions. If you feel pressured to make a decision, that person or business is not right for you. As was said many times, “no one is more interested in your money than you.”

I worked in sales a long time, sales support, advertising sales – the thing about salespeople, even when they’re honest, is that the *best* salespeople really believe in what they’re selling.

They can be completely misled (because they tend to be optimistic, people-liking people who think they’re smarter than the average bear) and then sincerely, with great verve, steer you completely wrong with no ill will at all.

A family member with an MBA keeps losing money on high-fee investments sold to him by friends, and trying to get me to buy into the same stuff he’s into – even with his bad track record he’s sure each new thing is the one that’s not just a high-commission vehicle for his “friends”. He did better with his money before he got the degree and learned all the technical investing mumbo-jumbo, because he was less confident & did more research.

As a real estate agent I tell my clients to listen to their agent’s advice, but make their own decisions. As I have their best interests in mind, and I try to be the “head” in the transaction, while they buy on emotion using their “heart”. Ultimately, only they truly know how much they’re comfortable paying on a mortgage each month, or the minimum amount they can actually accept for their property.

This is an excellent point, but what I’m surprised not to see is an admonition to ask “why”. Sure, you can smile and nod and just go do the research on your own, instead of asking the professional you are paying “Why is choice X for me better than choice Y?” or “What is the reason you recommend I do Z?” If you absolutely cannot trust a professional you hire, then why are you bothering to hire them? You’re no better off than if you’d done all the research yourself, except you’re also out the fees for paying a professional you don’t trust and can’t rely on.

By the way, the sign of a trustworthy and competent professional is that they will take time to answer your questions and are not offended if you do your own research. Yes, I often cringe if my clients say “So I read this on the Internet…” because a lot of times, it’s nonsense; but it’s my job to explain to them why I think it’s nonsense and why my advice is correct. If a client doesn’t understand why I am giving them certain advice, I am not doing my job, period.

@mythago I have to disagree with you. You don’t hire experts to tell you what to do. Believing the argument of someone else could be expensive and dangerous, especially if that person is not a fiduciary.

People who make sales or give advice for a living have significantly more experience dealing with the subject matter at hand. If their client raises an objection because of other research they did, it should be easy for that expert to refute – it’s their job after all. And being an expert means they naturally have the power of asymmetric knowledge on their side.

In many cases, dealing with objections is a well-practiced activity of a sales person. Most experts know other experts in the same field who disagree with their viewpoint and also practice handling objections. Winning a client over because you take the time to listen and handle their objection does not make your viewpoint right. It only makes you a good arguer.

People may “hire” an expert because the expert works in an industry that has hidden fees, collusive fees, or finding other avenues is too difficult or seemingly expensive. But finding a trustworthy expert does not mean that expert will have access to (or even know about) your best solution. Paying a fee or commission to someone just because you trust them, or trusting someone just because you pay a fee or commission to them is flawed. These activites may be linked emotionally, but it may also be an expensive belief.

You are right, though, it is useful to ask why. Understanding the reasoning behind a recommendation is part of complete research. Understanding your motivations is required to make your own wise choice.

If only you would’ve been able to teach this to those who blindly listened to their mortgage brokers when they said they “could afford the house… and oh, by the way, their payments might move up in a few years.”

Thinking critically is what separates average from great and is a shield from making stupid choices.

Great article JD!!! You were on target. What a travesty it is that “Financial Advice” is so often contingent on the sale of a product. It has created a financial system full of flaws and loopholes. Sadly, we have an entire retirement planning platform that not only encourages, but also rewards predatory practices.

I am the owner of a Registered Investment Advisory firm, and agree wholeheartedly with JD’s perspective. I wrote a blog back in January discussing this topic:

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My name is J.D. Roth. I started Get Rich Slowly in 2006 to document my personal journey as I dug out of debt. Then I shared while I learned to save and invest. Twelve years later, I've managed to reach early retirement! I'm here to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you get rich slowly. Read more.

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